Felix Salmon

I’ve been contrarian about lottery tickets in the past: I’ve said that buying them can be rational, and they can even be a sensible investment. So I’m not sure why this ad I saw today made me so very angry:

The good news is that the two largest corporate credit unions — cesspits of toxic waste which loaded up on mortgage-backed securities for no good reason and in violation of their raison d’etre — have been "conserved" (taken over) by the NCUA, the credit-union equivalent of the FDIC, which has finally woken up to the fact that the current management at these shops is utterly incompetent and can’t be trusted.

David Reilly is the latest columnist to weigh in with Geithner-resignation speculation; he alights on Jamie Dimon as the next Treasury secretary. And he’s right when it comes to both Dimon’s biggest strength and his biggest weakness:

So far, all of the commentary I’ve seen has focused on Bernanke trying to reflate the economy and lower long term interest rates. That’s obvious enough. But it seems like the real story here, or the backstory, is that China has essentially exercised a put option on its US Treasury bonds. Bernanke made the move a week after China’s premier said he was "worried" about his US investments, and, as Brad Setser has graphed, the US was already having a harder time placing new debt issues. Besides, if China gets the money now it can fund its stimulus package more easily.

I’ve been rude about Gary Matsumoto’s conspiracy theories in the past, and now he has a doozy of a new one: the bankruptcy of Lehman Brothers had very little to do with its management or its insolvency, and everything to do with naked shorting. Gary Weiss is one journalist who’s convinced that naked shorting is not a problem: I had this IM interview with him this morning.

There’s a lot of noise this morning on the Citi preferred/common arbitrage, with the WSJ giving an overview and Tyler Durden going into the gory details. And just in case you’re not completely confused yet, Citi has now announced a reverse stock split to go along with its preferred-common exchange.